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tv   Power Lunch  CNBC  December 1, 2014 1:00pm-2:01pm EST

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why. >> i think the upside options and it goes higher. >> conoco phillips. >> we heard about fire eye. >> nobody is safe. this is the way to protect yourself. >> i like newal, leather acquisition. have a great day. "power lunch" starts now. "halftime" is over. "power lunch" and the second half of the trader day start right now. thanks a lot. a lot happening today. apple, oil and the shopping season. apple shares plummeting before recovering just a bit but they are still down by a fair piece all about 3%. and as you know oil down 34% in six months but jumping 2% today. who gets hurt the most? where are the opportunities? what's the impact on the transports as we look at this global power struggle? and two days in the valley with a secret shopper. the west coast store she has
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been looking at to see where the deals are. she is really looking at them and she will be with us today. that and more on a very busy hour of "power lunch." first let's check in with sue at the nyse. >> we start with a scary sign at least for some. trim tabs reporting inflows into exchange traded funds hit levels not seen since november of 2007. stocks dropped like a rock from that date losing almost half of the value before bottoming out in march of 2009. let's bring in bob pisani on that note. those are interesting statistics. you could argue that is a bullish case and people are putting more money to work in etfs or look at the volatility in the market and say perhaps it is topping out in bearish side. >> november was a really big month. the s&p was up 2.5%. when you get months like that it happens. secondly, we are seeing huge
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inflows of the u.s. equities. the whole world wants to get into the united states. europe is weaker, china is weaker. money is flowing here naturally. the etf business is on fire. we arech approaching $2 trillion in assets. everybody wants the indexes, cheaper, easier to trade. >> is it also perhaps because it is getting harder to find individual stocks? that are not fairly valued or overvalued? >> stock picking is becoming a much more difficult business and a lot of people have concluded it is easier to buy indexes. it is the triumph of indexing. >> thank you very much, bob. you heard the numbers, are you at all worried about that? jack, let me start with you. >> i don't worry about that number at all. i believe we are moving much
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more into a stock picker's market. it's not easy but particularly if you have managers working on both sides of the market both long and short this is the kind of market that you like. yes, we are having flows coming into the etfs. that doesn't mean we are not having dispersion among earnings reports and among stock performance. i think we will see that continue as we move into 2015. >> do you agree with that? i know you think the market will do fairly well into the new year. what about the etf numbers versus picks individual stocks? >> the etf numbers has been a trend in place for some time now. you have seen net outflows from 2007 out of mutual funds actively managed funds and large inflow into etfs. that trend really continues. it's kind of rational on behalf of investors because the number of publicly traded companies is actually declined.
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so your total selection has dried up. so i do agree that active management is going to play an increasing role and you saw it in this stock market this year. dividend payers, u.s. domestic stocks dramatically outperform. >> weigh in on that if you will. a lot of our viewers go into mutual funds. you can be very particular about which mutual fund you go into and get one actively managed versus a passive fund. which would you recommend? >> i definitely recommend active managers at this point in time. past performance is not indicative of future results. we see that on the bottom of every report. i actually think that now is when it comes into play. active managers are going to do much better than just simply playing the trends here. >> gentlemen, thank you very much. appreciate it. good to see you both. let's go up to dominic chu for a "market flash." >> so here what we are watching
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the dow jones transportation average, the rise in oil prices today or bottoming out in some way shape or form may have investors scrambling. airlines, alaska air, norfolk southern on the rail side and kansas city southern a tough day for the transports. let's keep this in mind. delta airlines stock is up 50% just since the middle of october so profit taking is certainly part of that picture, as well. >> thank you very much. early holiday promotions and on hine shopping taking a toll on brick and mortar retailers over the thanksgiving holiday weekend. national retail federation estimates shoppers spent 6.5% less than a year ago spending an average of $381 at stores. total spending fell 11% to about $51 billion over the entire part of the weekend. holiday shopping season comes as
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prices at the pump continue to decline. the average price of gas now in the u.s. is $2.77 a gallon. and come on in here. here she is morgan brennan. big day for online sales and that means big business for the delivery companies. last year they had some problems when they were swamped with orders. there were promises made that that package was absolutely positively going to be there under the tree and sometimes it wasn't. >> that's right. that was last year. so that is one of the things in focus this year. ups, fed ex and the u.s. postal service are bracing for another record peak season. the nrf expects online sales to increase 11% with more than half consumers shopping digitally this season. while cyber monday is still big many people are waiting longer to make purchases.
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that's the key because a last minute spike in online shopping contributed to shipping delays last year. 2 million packages didn't make it in time for christmas. ups was late on about 1.3 million packages according to ship matrix and fed ex. so this year they are pushing their busiest, forecast for the busiest days back closer to christmas. ups and fed ex have poured hundreds of millions of dollars into updating networks and hiring more workers to try and keep up. and the postal service which didn't experience delays last year is already doing sunday deliveries. analysts think all of this will be enough to prevent another christmas catastrophe though bad weather is always a wide card when it comes to the shippers. investors are upbeat, as well. take a look at these stock charts thanks to lower oil prices we have seen shares of ups and fed ex recently hitting
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fresh 52-week highs. if that trend to continue we are really going to have to see them deliver for peak season otherwise we could see another sell off like we did last year after those late holiday packages cut into q 4 earnings. >> they got to deliver. >> they got to deliver. lower gas prices on the one hand and some disappointing holiday sales numbers on the other. what are consumers doing with their money? we will ask that question to a retail analyst in just a second. first we want to hear from you. where are you doing your holiday shopping? in a store or online? we are going to find out. go to cnbc.com/vote and weigh in. i guess probably everybody goes both places one way or another. liz dunn is with us. long time retail analyst will take a look at how and where consumers are spending their holiday dollars. you were out all weekend long in california. what did you see? what was traffic like?
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which kind of malls seemed to have the fullest parking lots and such? >> i was surprised with the crowds on thursday. thursday was really busy, just very disciplined shoppers getting out there with the specific list in mind looking for those door busters. the rest of the weekend was pretty much a bust. the higher end malls seemed to be doing a little better than lower end malls that i visited. none of the parking lots were particularly busy early on on friday or throughout the weekend. it was fairly mediocre. >> i went to a sports authority saturday morning around 10:00. there were more employees in the store than there were shoppers. it was not a particularly good sign, i would say, for retail generally. you said that the higher end malls seemed to have more traffic than the lower end malls. what does that tell you? >> well, i think that there are a number of things that people are floating this weekend about
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this weend. i think that some consumers may be staying home because they feel like they can maybe get better deals online or they are not so sure that the great deals are out there for this black friday weekend. i think, also, the higher end consumer continues to be in a little better shape and have a little more to spend and not facing some of the same pressures that the lower income consumer does -- >> what about the idea that black friday and the weekend shopping spasm is kind of so 2007? in other words, now the deals begin much earlier. many more of us are shopping online and we don't rush out over the black friday holiday, we are kind of beyond it. >> the deals definitely started earlier. thursday stole some of the business from friday. and really with all the way.
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i think that steals a lot of hype from black friday. it is a little bit of a dated concept. to the same extent i think retailers feel pressured if they are not in the game than perhaps they lose market share. look at thursday's sales were very, very strong. if you weren't open thursday you missed out. >> very quickly, give me two stores that you think were standouts. >> i think lululemon was a standout. they did have a clearance. they had a dj and muffins and were not offering a blanket promotion. american eagle was a standout. their promotions were less than last year but still had crowds. >> i know we will be back and checking in with you as this holiday season ensues here. let's lock in the vote. where are you shopping? i figured it is basically split
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ticket. 53% say online. 47% say in store. sue, down to you. it's already turning into a nightmare of a holiday season for sony. it's major movies leaked online after a hack attack. julia boorstin joins us with some of the fallout for the company. >> sources tell me the fbi is now involved in investigating who is responsible for uploading five sony films four of which have yet to be released. there are questions of whether kim jong-un was behind the attack because of the interview, a sony comedy about an assassination attempt on the north korean leader. the movie is scheduled for release on christmas day. north korea called the movie an act of terror and promised retaliation against the u.s. if it was released. the reboot of "annie" is one of the movies posted to piracy
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sites. the most pirated sony film in the wake of this attack is "fury" starring brad pitt. it has been in theaters for over a month. in three days it was illegally downloaded nearly 900,000 times according to one report. a sony spokesperson saying the theft is a criminal matter and we are working closely with law enforcement to address it. that's not all, the hack also took its toll on productivity at the studio. the company says it is just getting systems up and running after a week of no e-mail or voice mail. >> a difficult situation all the way around. thank you. there is one company looking to cash in on cyber monday. it's blue nile. the ceo joins us next. are consumers spending more this year? find out what trends he is seeing. >> and william dudley making big head lines minutes ago. steve liesman speaks with him
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exclusively about what is ahead for the fed and the economy. here's some news you may find surprising.
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we're for an open internet for all. we're for creating more innovation and competition. we're for net neutrality protection. now, here's some news you may find even more surprising. we're comcast. the only isp legally bound by full net neutrality rules. welcome back to "power lunch." we are watching shares of huntsman chemicals here. the chemical maker is cutting 900 jobs and said it was evaluating options to reduce capacity in the pigments and additives business. the cuts will save it about $130 million a year.
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huntsman down by about a percent. over the past year shares up about 10%. >> thank you very much. california resources begins trading on the nyse here today under the symbol cyse. intel will supply the chips for the next version of google glass replacing processors from texas instruments according to the "wall street journal." >> glaxo planning to cut hundreds of jobs in the u.s. it is, of course, cyber monday. deals on smart phones and gadgets might entice you on the short term our next guest is quick to remind you that diamonds are forever. blue nile rang the opening bell at nasdaq this morning. good to have you with us. >> good to be here on cyber monday and talk about incredible
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diamond values to the market. >> let's talk about one sliver of the market that i want to get a sense of how hot it is for you. that is mobile. there is online shopping and then there is mobile shopping. how much a bigger hunk of your business is it? >> mobile is really accelerating. we saw 60 plus percent of traffic coming from mobile device over the thanksgiving weekend. in china we saw a ten-fold increase. black friday was the biggest black friday in traffic we have seen. it was a mobile weekend for sure. >> are people just as inclined to buy an expensive diamond, a $10,000 piece, a $40,000 piece or greater online than they are -- via mobile as they are online or in a store. >> rue sell $40,000 diamonds on mobile device. we have sold $225,000 stones on
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a mobile device. >> your stock is up over the past month or so but it has been a rough year for you. how hopeful are you that the stock is now in a different gear than it has been? >> we really concentrate on driving our business. although q 2 wasn't as strong as we had hoped for there was increased volatility in the market. what we have done in q 3 was a 7% growth rate based on driving the value and mix. the quality with 250,000 stones on the website and prices that we have documented are 40% to 70% lower than our competition through wakefield research really allows us to get our feet back under us. q 3 demonstrated that really well. >> it was a nice quarter. 7% increase or thereabouts. let's talk a little bit. we have been talking a lot today about how it was not such a great sort of shopping weekend
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but you just said that this was your best black friday ever. how does this holiday season stack up and how does it look over the next three or four weeks for you? >> it is really critical. this was our biggest traffic on black friday ever. traffic is one thing. business, we have 23 days of christmas to go. until that period of time is over the quarter is not done. the black friday was the beginning and we have a long way to go. we feel really good about the results over the four-day period wednesday through saturday. >> i'm just curious, harvey. someone buys a diamond from you, a $40,000 diamond, how does it get to them? do you ship it via fed ex and what is the insurance cost on that? apart from the idea that i'm not going to see the diamond that i'm buying. i'm doing it online. what is the wrinkle in shipping? >> you know, the fact of the
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matter is that consumers spend a lot of time searching for diamond. we have a 30-day no questions return policy. we have a very good track record of delivering to a consumer with no problem. we feel comfortable with the security online today via delivery of the diamond is not a problem. >> i appreciate you being with us and good luck to you as the season continues. >> happy holidays. >> you bet. we are going to talk about the oil shock. crude spiking higher today but sitting near five-year lows. the ripple effect covered from every angle. michelle caruso-cabrera looking at the break even cost for oil around the world. dominic chu drilling on the stocks. phil lebeau with the impact on the airlines and impact of falling oil prices on u.s. producers. brian sullivan is live in bakken. are you spending more on gas
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crude hit five-year lows. almost 4% on west texas and brent moving higher, as well. prices, though, have plunged about 30% since june. let's talk now about the broader impact of those lower oil prices. dominic chu on the big oil stocks. michelle caruso-cabrera with the break even cost for oil producers around the world. phil lebeau with what it means for airlines and autos and brian sullivan is live in the frigid bakken with impact on u.s. producers. you get to weigh in. are you spending more as gas prices drop? go to cnbc.com/vote to let us know what you are doing. >> tyler, been a rough stretch for the energy stocks. today we are trying to find stabilization after posting a huge decline energy stocks still just hovering around unchanged we will call it but have been trying to find some footing. the sector is performing just
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about in line with the overall market. among worst performers so far today are names we have been hitting. many of the independent oil and gas exploration and production companies are still sharply lower. you look at a new field, apache and that group all under performing the overall market. as for the oil and gas drilling companies look at the service companies and those types of companies, as well. trans ocean, nabors industry, halliburton. if you are looking for a bright spot or value hunting starting to happen check out the oil majors, the oil giants that do everything from finding oil in the ground to turning into gasoline. look at exxon mobil, chevron up about 2.5% bucking the trend both up by the overall market. looks like there are some traders nibbling for the big companies given the recent pullback in oil stocks. helping to drive the dow, as
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well. >> friday chevron was one of the big turkeys on the dow. to michelle looking at the economics of getting oil out of the ground and the pain with prices. she tells me that i'm going to love this map. >> it tells you the whole story quickly. some oil is easy to get out of the ground and some is hard. when it is hard it is more expensive. this is the whole world. take a look at north america. we will show you a range of prices in texas where canada and range of what it costs is $50 to $100 per well depending on the easiness or hardness of the ground. in the bakken is $40 to $70. in various parts of texas $40 to $80 per barrel. the rest of the world brazil way offshore it is really expensive,
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$70 plus they need. here is the are you kidding me number. saudi arabia. their break even is $10. some wells i'm told as low as $5 per barrel. they can absorb a lot more pain even though they built budgets for much higher numbers. when we talk about what happens for u.s. shale production. citi thinks if you see the price fall to $70 that reduces production growth by 25%. production growth flattens when you get to $50 per barrel. another key thing to watch for here, what is happening in various parts of the world where they need oil to be higher. in russia hitting an all-time low. sky rocketing higher. you almost got $54 to the dollar today. it has come off now that you see oil rebounding today. sue, back to you. now to phil lebeau in chicago with what lower oil and gas prices mean for the airlines
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and the autos. up to you, phil. >> better earnings for the airlines. that's the quick answer in terms of what it means for the airlines. take a look at gulf coast jet fuel. the chart is not as predominant. it is moving lower. when you look at the airlines a lot of people say are they going to take out the fuel surcharges? that's not going to be happening. the lower costs are driving higher profits. those fuel surcharges may not be delineated on tickets but remain in place for most carriers particularly foreign carriers. almost all airline stocks getting back a lot of the gains they have established over the last week or two. most of that today. look at the stocks and what they have done over the last year or last three months we should point out. as for the auto industry and the impact of cheaper gas prices, sport utility vehicles and cuvs up 11.9% year to date. on black friday i checked with dealerships they saw sales of those vehicles up 10% compared
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to the same day last year. hybrids like the toyota prius down 15%. as long as we are talking hybrids and fuel efficient vehicles let's talk about electric vehicles and shares of tesla down almost 5% on the day. some are saying it is down because of the report last week that bmw does not want to buy a stake in the company. other people are saying it is down because there is going to be less demand for electric vehicles. keep in mind teslas are sold to people who want a luxury car. they are not worried about whether or not they are saving money at the park. it is a luxury car play and not an energy play. >> are you spending more as gas prices drop? 71% of you say no. only 29% say yes. very interesting. that's the consumer angle. now, what plunging oil means for
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u.s. producers? brian sullivan is out in the bakken in north dakota. >> reporter: it's interesting about this conversation we have been having back east is that everything here is almost exactly the same as it was when we paid a visit last year. most people told us we had dinner with a group of folks last night they said things are still humming. rigs are still going, houses are still going up, restaurants are still packed. car dealerships selling a lot of cars. the f-150 appears to be the vehicle of choice out here. maybe something will slow down down the road because all slow downs have to begin somewhere. you talk to folks out here and they are busting butts working hard like they do every day. so far they haven't felt much on change. >> you don't detect much of a difference at all from the last time you were there? >> it is about 50 degrees
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colder. when the slow down happens and the drop in oil prices has been so rapid it is going to take time to work through the system. the risk is this. everything is related to oil around here. if oil prices go down wages may fall. if wages fall because people are looking to sort of help their margins then maybe real estate could fall. banks have made a lot of loans against the oil and the real estate. you understand that as it builds up so might it come down but aevld we talked to last night we had a fun dinner on camera. we will show that in "street signs." they are all booming. no slow down yet. >> thank you very much. i remember the last time you rur there you looked like you were having a lot of fun and i'm sure you are again this time. we will take another visit later in the day. >> tyler, very quickly, virginia tech 11 straight win over uva on saturday. >> i know who won.
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it pained me to watch. you win once again. sue, down to you. we have had some huge percentage moves in the metals market. the gold market surging better than 4% on the trading session at one point now up almost 4%. the platinum and palladium markets have been huge movers. the platinum moved sharply trading up almost 3%. palladium dropping on the trading session and we have also a big move in the silver market as you can see a better than 7% move in silver. so it's been quite a wild day so far to start this week. >> absolutely, sue. so let's continue with that theme here. with gold rallying the gold stocks have followed suit, sue. all showing very healthy gains. you can see there on the side of your screen here. gold not the only medal on the rise. check out the i-share silver
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trust up about 7%. what is interesting about this commodities traders follow these metals. etf traders watch these stocks. the gold has traded 10 million shares today. on average for a full day it trades about 7 million. the silver has traded 18 million shares. on average that only trades about 8 million per day. a lot of heavy volume going towards those precious metals. to the bond market now wh e where. >> you will see it moved away from the 1.50 home level and moved down towards the mid 1.40s.
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right now 73 basis point bund you add about 147 basis points it is moving back out. you want to watch that spread. let's look at october 15 chart that's about the last time we closed at these levels. and the last chart this is a one-month chart of barclays. you can see energy taking a toll on some that have used energy as collateral but overall it is a far cry from its widest over the last several years. >> straight ahead steve liesman's exclusive one-on-one interview with william dudley. rate hikes ahead, economy, fallen oil prices. you will hear it all right here only on "power lunch" next. look, i love the way he controls abthe lightsbutler. and unlocks the door when i forget my keys... it's just that... i feel like he's always watching us. yes, that is why we should use wink.
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casino stocks taking a fall today. november gambling revenues fell to the lowest levels since september of 2012. this is continuing a downward trend that began last summer. as a result all losing ground on
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the day's session. >> thank you very much. new york fed president making big headlines minutes ago and now standing by live with steves liesman. >> thanks very much. i'm here with fed president bill dudley. thanks for joining us president dudley. let's get to monetary policy in a second. you sat last week in frupt of the senate committee looking at the new york fed and the oversight. it was a long list of things they criticized, failure to find offshore accounts. the commodities trading on the part of the banks. do all of these amount to institutional failure at the federal reserve and is there a need for overhaul? >> i doane think so, steve. we have been doing a lot of things to guard against the risk of regularatory capture which was the theme of the meeting. for example, we rotate people
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across different institutions so you can only be an examiner for three or four years before you are rotated to a new institution. we have created new government structure of what is called the lissic above the new york fed that makes key decisions. you are looking at a firm on a cross-firm basis. i think the issue of regularatory capture is a real issue and something we have to guard against. we have done a lot of things and will continue to look at this issue. >> can you say that these things that had not been found by the new york fed previously will be found in the future now? >> i think there are always things that will happen. this idea that somehow the new york fed or any supervisor will prevent all bad things from happening i don't think is a realistic standard. which bad things happen do these institutions have sufficient capital resources so the problem they encounter doesn't lead to
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financial stability consequences for the broader economy. the thing i would point to is simple. is the u.s. banking system safer and sounder today than 25 years ago? the answer is clearly yes. >> senator reid has a proposal that your job should be approved by the senate to create greater public accountability. do you agree with that? >> i think it is the priority of congress to decide what the rules are. >> you said that in the committee but do you agree with that idea? >> it's not for me to decide. however the congress wants to do it it is their prerogative. i think that obviously if congress wants to put me through it or somebody else in my position through the confirmation hearing it is their right to do so. if that were to happen to me i would go through the process. >> the two-year note trading at 38 basis points. 16 of 17 members have a forecast for the feds fund rate double
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that for 2016. is there a massive lack of communication or misreading of the federal reserve by markets right now? is there a need for a pretty volatile adjustment in interest rates if the fed follows through on where its own forecasts are? >> i wouldn't compare the two-year treasury note to the funds rate because there is a credit premium on top. the big reason for the difference i think is that the market forecast represents the means. it is all potential outcomes. the modal forecast which is what we right down in terms of summary of economic projections is what we think is most likely to happen. people in the market think there is some chance we can get a bad draw on the economy and not lift off at all. that is incorporated in that. that is not incorporated in our forecast. this is one reason why when we do our surveys we ask the same question that we are answering, what do you think is most likely
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outcome. when you look at those projections those are much higher than market price is right now. >> do you think a two-year note is massively overpriced? >> i'm not going to pine on what the appropriate level of interest rates. >> what i am going to say is we are being very clear in terms of how we are communicating. we said exactly what we think it will drive, lift off monetary policy. we talked about how it will take place. we are going to target the federal funds rate as our primary tool in terms of tightening monetary policy. we have put -- described through the summary of economic rejections when we think that liftoff is likely to occur. we are communicating clearly with the markets. when we do lift off will it be a potential bump in the road for financial markets? potentially. we have had two events over the last two years. one chairman bernanke about the potential for adjusting asset
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purposes and then the actual adjustment downward no reaction. so it's very hard to know how markets are going to react to the potential for liftoff. >> we were talking about the effects of lower oil prices on the economy today. you said in your speech that you didn't have so much concern about the down side of this and pointed to a lot of upside, better consumer spending. how much concern is there for the financial system that there is a lot of leverage in the high yield market when it comes to oil and this is something you have to be concerned about for safety and soundness of banks? >> i think there is leverage related to oil and gas exploration business under some stress. the amount of dollars we are talking about are small relative to the size of the u.s. economy. to me it doesn't rise to the issue where it is systemic. >> thank you for joining us. we will have another piece for
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cnbc.com. >> steve, i will take it back. great interview as always. we still have a lot to talk about. our market analysts will weigh in on what new york fed president bill dudley just said and talk more about plunging oil prices and a bitter divorce, a very costly combination for one oil tycoon who has lost more money in three months than eric schmidt has made in a lifetime. ponder that one. "power lunch" is back in two with the dow down 16 points. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. you're down with crestor.
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welcome back to "power lunch." check out what is happening with dow industrials rebounding down about 12 to 13 points. leading come back are chevron, microsoft and exxon mobil. if you want to look for where the most points are coming from just because of exxon, chevron and visa the dow is getting 35 points just from those three
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stocks alone. >> very interesting. thanks, dom. stocks are starting the week off a little on the down side. apple losing after a trim by 1% due to high valuation. joining me here bob havelock and hue johnson joins us. i know you have liked apple for some time. you have raised your price target from 122 to 135. why did you do it? >> this is all about margins. we were at 122 when we expected somewhat flat margin. the number we are looking at is that margins might be better than we had expected. that really warrants an increase in the price. the relative performance of the stock is great. as a result we can't catch up to it. we keep raising targets.
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as long as they keep performing well we keep raising targets. apple has been a real winner. >> down better than 2% today. is that another entry point for you today. did you pick some up? >> i wish it was an entry point. i have been looking for an entry point but i hate to tell you this somewhere between $100 and $110 per share. and obviously i haven't been able to get that. i know i wouldn't call this an entry point. i want to see a little more weakness before i call it a really appetizing entry point. i would still buy apple. long term it is fine at current levels. i'm looking for a much more enticing entry point. >> weigh in on the market. we heard bill dudley talk about the fact that the economy is doing well and oil prices expected to give the economy a boost. does that translate into higher stock prices? >> i think what you are going to have to take into consideration is we have moved off the low since the low in october but
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from a long term investor standpoint of view you have to look towards the bigger picture, is the bigger picture bright? is there a positive trend going on? if you look at the economic data there is. the manufacturing data still showing growth in the overall economy. take a look atkining claims, levels they haven't seen since the year 2000. look at housing. we are seeing upticks in existing home sales haven't been at this level since a year ago. so we take a look at the building permits, again, not since a year ago. if you look outgoing forward you see better earnings. this year's earnings because of these lower commodity prices help fuel the economy. >> we just saw some of the
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things you like, s&p health care, things like that. what about valuation snz. >> valuations look expensive for a short term investor. right now we have to look at 2015's earnings per share estimates. if you look at 2015 it doesn't look that expensive. take a look at the bigger issues looks attractive. the cyclicles are the area of the market you want to be focused in on. >> where would you put money to work today? >> i play a little to the safe side. i don't agree on the valuation issue. i think on a short term basis we are overvalued. so i would keep a meaningful allocation to equities but start to build a little defense. the way you do that is buy large cap. the second thing is staples and health care are my two best sectors. there are lots of things you can do in other sectors. play it a little bit on the safe side on a short term basis because i think we are a little
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bit overvalued. >> thank you very much. good to see you. talk about oil shock, plunging prices add in a plauk buster divorce. how much money did oil tycoon harold hamm is bleeding these days? the numbers are staggering. she's still the one for you. and cialis for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use
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in this hour of power transports rising a little bit off of session lows. down 230 points. huntsman rebounding as the chemical maker plans to cut some 900 jobs. and new york fed president bill dudley calls for a mid 2015 liftoff for interest rates. plunging oil prices and a bitter divorce, a toxic cocktail for one oil tycoon. that story next. often enough, . thank you mom for protecting my future. thank you for being my hero and my dad. military families are uniquely thankful for many things, the legacy of usaa auto insurance could be one of them. if you're a current or former military member or their family, get an auto insurance quote
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welcome back to "power lunch." down 7%. the stock is up some 7% this year doubled although well off the 52-week high of $479 per share. plunging oil prices and a bitter divorce, costly combination for one oil tycoon. robert frank has the story. this one hurts. >> it's a big dollar number.
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harold hamm lost more welt in three months thanaryic schmidt made in a lifetime. worth 20 billion as of early september. oil prices fell and so did shares of clr. the paper fortune basically cutting the wealth in half working out to $100 million a day or $4 million per hour for three months. hamm has another problem and that is his divorce. a judge ruled that he has to pay his ex-wife close to $1 billion and her attorney says she may appeal for a higher amount. hamm was the son of oklahoma sharecroppers and got his start pumping gas. he said i still fear falling back into poverty. he did escape poverty but can't escape oil prices. >> down to the last 10 billion. sue, on that note we leave you here. that will do it for a monday
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edition of "power lunch." december 1, i can't believe it. >> i can't believe it either. pressure. the dow is trying to turn positive. it is really struggling right now. we are down about 20 points. we'll see whether it can pull it off by the end of the trading session. >> down to my last 10 billion. >> i wish. "street signs" starts now. will the drop in oil prices hurt one of the greatest economic booms in recent american history? that is the question. i am brian sullivan. i am here in north dakota which is really the heart of the bakken shale. we are going to go into the oil story and some of the story lines that maybe we have not talked about yet enough but we will. >> that is exactly why we have sent you out there. don't go licking lamp posts. let's take a look at what is happening in the markets before we get to what

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